Small Business Aid Program Runs Out of Money
The Small Business Administration said Thursday that the $349 billion Paycheck Protection Program has burned through its appropriated funds and is no longer accepting applications for loans and grants. A second program funneling natural disaster relief funds to small businesses is also out of cash.
“SBA is unable to accept new applications at this time for the Paycheck Protection Program or the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding,” a statement on the SBA website said.
The PPP quickly ran through the funding provided by the $2 trillion coronavirus relief package, approving applications totaling $349 billion in less than two weeks. The disbursement of those funds is expected to take considerably longer, though, and the current status of payouts is unclear.
Lawmakers on Capitol Hill remain locked in a partisan stalemate over how to go about injecting another $250 billion into the program, which is designed to help small businesses keep workers on payroll and cover overhead.
The Senate held a brief pro forma session Thursday, but Senate Majority Leader Mitch McConnell did not bring up a GOP-backed bill that would provide an injection of funds. He did, however, use the opportunity to blame Democrats for refusing to support his approach on the issue, a stand-alone bill that addresses only funding for the small business program rather than the broader aid package that Democrats are pushing for, which would add funding for hospitals, states and local governments.
“This morning, the program ran out of money and shut down, just as we’d warned. But even now, Senate Democrats are still blocking funding,” McConnell said.
House Speaker Nancy Pelosi said Democrats were in negotiations with Treasury Secretary Steven Mnuchin. "We want to support what we did with the [Paycheck Protection Program] but we want to make sure that as it gets more money, many more people get more access to the credit," Pelosi said, defending the Democratic effort to add additional aid and new regulations to the PPP enhancement bill.
What’s next: The stalemate will likely last at least until Monday, the next scheduled meeting date for the Senate. And critics are saying that lawmakers will likely have to return to the issue once again, even after clearing the current hurdle, given the size of the problem. "We think at the end of the day we're going to need upwards of $1 trillion in order to satisfy the demand of America's small businesses," Consumer Bankers Association President Richard Hunt told Politico Wednesday.
